Week 5 - the end of the year)* (c) Noncurrent = 7,742,879...

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Suggested solutions to preparation questions – Week 5 Problem 10.10 1. Accounts Payable 20,000 Notes Payable 20,000 2. Notes Payable 20,000 Interest Expense 300* Cash 20,300 *$20,000 × 9% × 60/360 = $300 Problem 10.25 1. (a) Interest Expense = 3,888,541 – (13,499,276 – 10,851,299) = 1,240,564 (total mortgage payments less the principal reducing portion of mortgage payments) (b) Current = 10,851,299 – 7,742,879 = 3,108,420 (total balance outstanding at the beginning less the balance outstanding at
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Unformatted text preview: the end of the year)* (c) Noncurrent = 7,742,879 *Note: payment of 4,105,640 represents 3,108,420 of principal payments and 997,220 of interest 2. (a) Dr Cash 37,657,420, Dr Bond Discount 3,342,580 Cr Bonds Payable 40,000,000 (b) Liability = 37,657,420 (i.e. 40,000,000 – 3,342,580) 3. More. Due to amortisation of the discount. The bonds are issued at a discount so the market rate is higher than 7.2%....
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This note was uploaded on 03/19/2012 for the course ACCT 1511 taught by Professor Kim during the Three '10 term at University of New South Wales.

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